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Programs can help employers shift costs

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The Patient Protection and Affordable Care Act will not require businesses to offer wellness programs to their employees, but it creates strong incentives for doing so.

Under the new law, employers with a health-contingent wellness program in place will be able to charge employees more for group health insurance coverage based on certain factors such as tobacco use.

"Besides payroll, health care is the second biggest cost item for business owners, so it's top of mind," said David Vassilaros, director of health care reform and regulatory affairs for Susquehanna Township-based Capital BlueCross. "They want to know how they can keep those costs as low as possible and still be able to attract good employees."

The Affordable Care Act helps by giving employers a way to shift health care costs for employees who lead the most at-risk lifestyles back to those individuals.

Vassilaros said the goal is to get employees to take their personal health seriously. That, in turn, will help employers save money not only on health care but also on related costs such as lost productivity, efficiency and competitiveness.

"I view health ownership as kind of the next American dream," he said. "The idea is for people to view the health of their bodies the way they look at the dream of owning their own home. And employers need to share that goal."

The type of wellness program that an employer chooses will depend on its employee base and culture. Capital BlueCross offers a Better Health Works program for its customers and employees. It includes digital coaching, email reminders and point-based rewards for completing various wellness activities.

Incentives vary based on the company but could range from additional employer contributions to a health-savings account, a reduced deductible, extra vacation days or drawings for popular electronics.

Penalties for not engaging in the wellness program or not improving results could be mostly financial, possibly in the form of higher deductibles.

Matthew Scott, senior vice president of HDH Group in Lemoyne, said many employers are getting aggressive with their wellness programs so they can go from fully insured to self-insured models where they will pay their own claims rather than paying the health insurance company to manage everything.

He said, "Savvy employers now are saying that's one way to manage the financial side of the Affordable Care Act." <

A closer look at wellness programs

TYPES OF WELLNESS PROGRAMS

Participatory wellness programs

These programs do not require employees to meet health benchmarks in order to get a reward — or they do not offer a reward. There is no limit on the maximum reward that can be offered.

Examples: Fitness center or smoking-cessation program fee reimbursement

Health-contingent wellness programs

These programs require employees to attain or maintain health-related benchmarks in order to obtain a reward. Nondiscrimination laws limit the maximum reward that can be offered.

Examples: Achieving certain results on biometric screenings, quitting smoking, meeting exercise targets

WHAT'S CHANGING?

Under the Affordable Care Act, employers will be required to comply with the following wellness practices as of Jan. 1, 2014:

  •  The maximum reward or penalty allowed under health-contingent wellness programs offered together with group health coverage increases from 20 to 30 percent of the cost of coverage. For programs designed to prevent or reduce tobacco use, the maximum reward allowance increases to 50 percent.
  •  Employers must provide a reasonable alternative standard for employees for whom it would be unreasonably difficult or medically unadvisable to meet the otherwise-applicable standard. The employee must request an alternative, and employers may seek verification of claims that require medical judgment to evaluate.
  •  Employers must provide eligible individuals an opportunity to qualify for the reward at least once per year.

RECOMMENDATIONS

Matthew Scott, senior vice president of HDH Group in Lemoyne, advises companies on how to prevent and mitigate risk through employee benefit programs.

Here is his advice for using wellness practices to comply with the Affordable Care Act and maintain a competitive advantage:

  •  Use a health-contingent wellness program.
  •  Tie wellness initiatives to your health insurance program.
  •  Offer onsite biometric screenings for employees and adult dependents at no charge to the employee.
  •  Offer HIPAA-compliant health coaching to encourage employees to improve their results.
  •  Create a system for constant monitoring and tracking of results.
  •  Follow-up with annual checks.
  •  Offer incentives for achieving or maintaining results.

DID YOU KNOW?

Seventy cents of every dollar spent on health care is driven by these four factors:

  •  Body-mass index
  •  Blood pressure
  •  Cholesterol level
  •  Tobacco use

Scott says employers can help manage and improve these risk factors by offering tobacco cessation programs, reimbursement for weight loss and rewards for completing an annual physical examination and/or onsite biometric screenings.

Write to the Editorial Department at editorial@cpbj.com

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